(News Bulletin 247) – The coffee chain has lowered its forecasts, penalized by sluggish sales in the United States and China. With a new general manager, the company is looking for the recipe to revive its momentum.

Starbucks delivers yet another unpleasant surprise to its shareholders. The American coffee giant, in difficulty for several months and which changed bosses suddenly this summer, warned on Tuesday of further poor performance in the fourth quarter of its staggered financial year, ensuring that it was in the process of carrying out a “strategic reset”.

The results for the fourth quarter, completed on September 29, “clearly show that we need to fundamentally change our strategy in order to return to growth and that is exactly what we are doing with our business plan ‘Back to Starbucks'”, said Brian Niccol, boss of the group, in a six-minute video posted on the coffee chain’s website.

Brian Niccol took charge of Starbucks on September 9, following the announcement on August 13 of the departure with immediate effect of Laxman Narasimhan, who had held this position for only sixteen months.

The group issued a warning on Tuesday on its fourth quarter results and, to a lesser extent, on its entire fiscal year 2024. Its full results must be published on October 30, after the close of the New York Stock Exchange.

Quarterly turnover fell 3.2% year-on-year to $9.07 billion (-2.9% at constant exchange rates). But, for a comparable number of stores around the world, the drop is 7%.

Its net profit per share excluding exceptional items, a benchmark for the markets, fell 24.5% to 80 cents.

“Important assets”

The group justifies these results by “softness” in North America, particularly in the United States where turnover at a constant number of stores fell by 6% due to a 10% drop in the number of transactions. partially offset by a 4% increase in the average ticket.

The promotions carried out “did not improve consumer behavior”, he noted.

Starbucks also suffered in China – its second largest market – with a 14% drop in like-for-like revenue in the wake of an 8% decline in the average ticket and a 6% decline in the number of transactions.

The United States and China, with 16,730 and 7,306 stores respectively, accounted for 61% of the number of Starbucks coffee shops in the world at the end of June.

Over the full year, revenue should increase by 0.6% to $36.18 billion (+1.3% at constant exchange rates) but proforma net earnings per share should decline by 6. 5% to $3.31.

“I think our problems have solutions and we have significant assets to build on,” said Brian Niccol.

“We are already taking rapid action, regardless of the challenges of the consumer context,” he added.

“Not always up to par”

In a desire to illustrate its “confidence in its long-term growth”, the company intends to pay a quarterly dividend to its shareholders, moreover, an increase: 61 cents, compared to 57 cents a year earlier.

“Despite our increased investments, we have been unable to change the trajectory of our footfall decline, which has put pressure on both our turnover and net profit,” commented Rachel Ruggieri, director financial statement of the group, cited in a press release.

“We are putting in place a business plan to reverse the trend within the group but it will take time,” she warned.

The day after taking office, Brian Niccol indicated in an open letter to employees that he intended to concentrate his efforts over the coming months on the American market, before looking at the potential of the coffee chain in the United States. ‘stranger.

“There is a shared impression that we have moved away from our fundamentals,” he noted, seeing it as an “opportunity” for improvement.

“In certain places – particularly in the United States – we are not always up to par” with the experience expected by customers, he explained.

In pre-opening trading this Wednesday, Starbucks shares lost 3.45%.

(With AFP)